Dell’s sorrows continue in Q3 PC market

By Suzanne Deffree, Managing Editor, News -- Electronic News, 11/29/2007

Dell’s pain has become its competitors’ gains. According to a preliminary worldwide PC market report from iSuppli Corp. released today, Dell underperformed the market in Q3 with meager market share growth of 1.5%, allowing other PC OEMs, including Hewlett-Packard and Acer, to increase their market shares.

Overall, iSuppli reported that global PC shipments amounted to 68.1 million units in Q3, up 13.8% from 59.9 million during the same period in 2006, and up 11.1% from 61.3 million in Q2. The notebook segment continued to drive the expansion of the overall PC market, with year-over-year growth of 33.5%. However, desktop PC shipments increased, as well, climbing to 39 million, up 3.4% from 37.7 million in Q3 2006, iSuppli said.

Dell shipped 9.9 million PCs worldwide in the quarter, compared to 9.8 million during the same period in 2006, the firm’s data showed. Company market share fell to 14.6%, down from 16.3% a year earlier, making Dell the top-5 PC OEM with the weakest growth during Q3, iSuppli reported. (See top-5 PC OEM ranking below.)

“Despite a renewed focus on its PC business, and the return of Michael Dell to the company’s helm, Dell’s channel business is taking time to ramp up and have an impact on company sales,” Matthew Wilkins, principal analyst for iSuppli, said in a statement.

HP, meanwhile, continued to expand its lead over rival Dell in the quarter. The company shipped 13.1 million PCs, a 32.7% and 3.2 million unit increase from 9.9 million in Q3 2006, according to iSuppli. The firm further said the growth allowed HP to outgrow global PC unit shipment growth, which amounted to 13.8% in Q3 compared to the same period in 2006.

Hewlett-Packard’s market share expanded to 19.2% in Q3, up from 18.3% in Q2 and from 16.5% in Q3 2006, iSuppli reported, noting that Q3 marked the fifth straight quarter that HP held the top spot in the global PC market.

“Hewlett-Packard continues to gain momentum in the PC market due to its strong channel presence and its moves to capitalize on the strength of the notebook segment,” said Wilkins.
 
Competition from Acer also hit Dell, with the Taiwan-based company delivered strong notebook sales, allowing it to displace Dell as the world’s number 2 maker of such PCs.

ISuppli noted that Acer achieved the strongest performance in the global PC market of all OEMs in the quarter, with its shipments rising by a 68.8%. Acer’s PC shipments increased to 5.4 million units in Q3, up from 3.2 million in Q3 2006. Acer’s global PC market share rose to 7.9%, up from 5.4% during the same period in 2006.

“Acer’s ascension in market share is due to its strong performance in the notebook business and its robust sales in the Asia/Pacific and European regions,” Wilkins said. “Acer is executing well in the channel and offering aggressive pricing.”

Even with its stellar Q3 performance, Acer still remains in 4th place spot in iSuppli’s top-5 PC OEM ranking, behind rival Lenovo.

Lenovo, with a market share of 8.1%, compared to Acer’s 7.9%, held on to the 3rd place spot, despite Acer’s Gateway and Packard Bell acquisitions. Those acquisitions, which had been predicted to be enough to move Acer above China-based Lenovo in the Q3 ranking, will most likely move Acer up a notch in Q4, iSuppli said.  

ISuppli’s latest worldwide PC forecast calls for unit growth of 12% in 2007.